After Shares Slump, DHFL Says Working With Lenders To Resolve Liquidity Issue
DHFL says it will resolve its liquidity issues without any haircut for lenders.
Dewan Housing Finance Corporation Ltd. is working with stakeholders and creditors to resolution of liquidity issues, without any haircut for lenders, the crisis-hit housing finance firm said in an exchange filing on Monday.
This after DHFL on Saturday reported a loss in the March quarter of 2018-19 and spelt out its worries on continuing as a going concern. The stock, as a consequence, was battered Monday—DHFL shares hit the lower circuit after plummeting as as much as 33 percent intraday.
"We're closely working with stakeholders/creditors to ensure there is a comprehensive resolution, without any haircut to the lenders, as has been speculated by few sections of the media," DHFL said.
The sectorial stress is well known for months, DHFL said, and the company has withstood intense pressure and continues to remain strong and solvent.
DHFL has also cleared significant amount of obligation to the tune of Rs 41,800 crore since September 2018, it added.
"For the last nine months, with single minded focus, we have met all our financial obligations and are looking to return to business normalcy at the earliest. Since September 2018, DHFL has managed to make repayments of over Rs 41,800 crore primarily through securitisation of assets and repayment collections," Kapil Wadhawan, chairman and managing director of DHFL, said in the exchange filing.
A significant slowdown in loan disbursement and growth since September 2018 strained DHFL’s financials in the March quarter—in turn impacting the overall performance for 2018-19, said DHFL.
The housing financier also said it is in an advanced stage of submitting its resolution plan under the inter-creditor agreement as entered into by banks. The inter-creditor agreement will examine and firm up the terms of the resolution process by July 25, 2019 and make it operational before Sept. 25, 2019, it said.
"The process of identifying a strategic investor is also nearing completion which will bring in an equity investor into DHFL to bolster its capital base. The board will be reconvening in the next two weeks to look through the potential proposals and will decide accordingly on the way forward," the company said.
It is expected that DHFL will be able to restart its business in August 2019 and scale it up in the months ahead.
DHFL over the past few months has not been able to fulfil its obligations towards debt repayment and there have been cases of a few defaults on commercial papers and bonds.
The NBFC sector has been facing a liquidity crunch since since the crisis at the IL&FS Group came to light in September 2018.